Technology is changing our society with the major disruptors (Google, Amazon, Facebook, Apple and Netflix) shifting perspectives and shaping the way that we live. We are all aware of this, but do we know what effect they are having on the commercial property market?

Although areas such as Silicone Valley are traditionally recognised as hubs of emerging technology, our capital cities here in Australia are also seeing change. Major players are already making waves; Google has an impressive footprint in Australia with their Sydney HQ sprawling across 50,000 sq m and three buildings. Melbourne’s suburbs are also becoming home to more technology companies with Seek recently winning a planning application battle for a new HQ and MYOB announcing a move to Cremorne by 2021.

It’s clear that technology companies are investing heavily in the Australian office market. The trend looks set to continue and landlords are starting to take note. This influx in activity can transform a suburb, driving up house prices, encouraging development and shifting the retail landscape. In Palo Alto, near Silicon Valley, the medium property price increased by 145% from $1.32 million (USD) in 2012 to $3.24 million (USD) by the end of last year. 

Although growth on this astronomical scale isn’t expected on our shores, we can already see evidence of change. Amazon is expected to move to new headquarters in the heart of Sydney’s CBD, doubling their space to 40,000 sq m, and we’re starting to see CBD prices and vacancy rates shift in this area.

Landlords are starting to consider what the next Google or Apple would want in a Melbourne office. There’s increased competition as a result of the technology giants moving in and this could push up rents in a market that currently has little supply.

Smart investors are taking note, thinking ahead and considering the potential needs of technology companies. The bigger players have deep pockets and are willing to pay for a prime location – for many landlords, they are the ideal tenant. 

Our advice? Keep note of the major players moving in and out of the market and always consider a long-term strategy when buying or taking on new tenants. Finding a space that’s flexible and adaptable will help in securing future tenants, no matter the market conditions. 

To learn more about Melbourne’s commercial property market or to get advice on buying or selling a property, contact one of our agents -